The public sector is ‘unsustainable economically and indefensible socially’, the Minister for Economic Development Sir Joe Bossano said as he rebuffed statements from Unite the Union’s General Secretary, Len McCluskey.
In a letter to Mr Cluskey, Sir Joe rejected claims by Mr McCluskey that he was “pushing austerity” in regards to public sector pay.
Sir Joe highlighted that the civil service has grown by an extra 700 employees since December 2011, but added that the cost of the public sector was unsustainable particularly with Brexit looming.
The cost of public service is currently £50m a month with payroll accounting for a third of this sum.
The recurrent budget for the public sector has been growing by an average of £28 million every year and civil service pay in Gibraltar currently stands at 25% more than in the UK.
Sir Joe stressed that while average earnings in the public sector have grown from £33,600 in 2011 to £40,600 in 2017, in the private sector the growth has been from £23,300 to £26,700 in the same period.
“Either some members of Unite in Gibraltar have deliberately misled you or we have very different definitions of what austerity means,” Sir Joe said in the letter to Mr McCluskey, the text of which was released by the Gibraltar Government yesterday.
He added: “There has been an increasing gap between the lowest paid and the highest-paid and between the public sector worker and the private sector worker. I believe that this is unsustainable economically and indefensible socially. I do not agree that this view makes me an advocate of austerity, it makes me a socialist.”
Sir Joe, formerly a trade unionist, said the public sector would have to undergo “huge cuts” to become on par with the UK.
To have incomes on par with the UK is what he said the Transport and General Workers Union fought to achieve in the 1970s.
“It would require huge cuts to get us back to where you are now in UK, that could be called austerity, but no one is advocating that,” Sir Joe said.
“I am saying that Gibraltar cannot continue this annual level of growth in the cost of the public sector into the future, especially in the context of Brexit; this is what the word unsustainable means.”
Sir Joe added that he “genuinely believes” the current structure of the economy cannot sustain this level of annual increases in the cost of the public services.
“I also believe that I have a duty to put this view in the public domain and labelling me, as an advocate of austerity, which is not what I am, is not going to shut me up or prevent me from putting to our people, the facts, as I believe them to be,” Sir Joe said.
“I consider this to be in the best interests of Gibraltar, which is what, motivates me and I have defended all my life. The best way of ensuring the protection of the public sector and the jobs of the people who work in it, is to understand that this is only possible if the model is sustainable.”
“However, if anyone thinks otherwise, and is able to show me, with facts and figures, how it can be done, I will be only too happy to stand corrected.”